Australia, China sign uranium deal

An agreement has been signed that will allow Australia to export uranium to China for nuclear power generation.

Transcript

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TONY JONES: With a stroke of the pen, Australia has set itself on the path to becoming the world's biggest uranium exporter. A nuclear safeguards agreement signed with China's Premier Wen Jiabao clears the way for a massive increase in uranium output over the next 20 years. It's already bringing pressure on the Labor Party to revise its three mines uranium policy to produce the extra yellowcake China's voracious industrial machine will need. From Canberra, Greg Jennett reports.

GREG JENNETT, REPORTER: Wen Jiabao came to Canberra in search of energy. In John Howard he found a willing partner.

MAN: An agreement for the cooperation on the peaceful uses of nuclear energy.

GREG JENNETT: With that, Australia secured its place as Beijing's nuclear supplier of choice. Their safeguards deal lays down the rules to prevent Australian yellowcake making its way into nuclear weapons.

WEN JAIBAO, CHINESE PREMIER (Translation): We believe that this safeguards mechanism will ensure that the nuclear cooperation will not be used for non-peaceful purposes.

GREG JENNETT: Among the doubters is former Chinese diplomat turned Falun Gong campaigner Chen Yonglin, who sees potential for the deal to backfire.

CHEN YONGLIN, DEFECTOR: Do not make bomb for Australia's future.

GREG JENNETT: Exports aren't expected to start for at least three years. When they do, they'll transform the scale of the uranium industry. Annual production will need to double at least, just to meet China's needs. Pressure for new mines has already begun.

JOHN HOWARD, PRIME MINISTER: In relation to capacity constraints or supply constraints, there are signs that the three mine policy is already crumbling.

GREG JENNETT: That policy binds the Labor premiers, preventing approvals of new mines.

MIKE RANN, SOUTH AUSTRALIAN PREMIER: I believe that policy will change at the next national conference.

MARTIN FERGUSON, OPPOSITION RESOURCES SPOKESMAN: We are strategically positioned to not only sell uranium, but also set some of the standards.

GREG JENNETT: Kim Beazley agrees, but sees no need to throw open debate on the mines policy until the conference next year.

KIM BEAZLEY, OPPOSITION LEADER: That is simply not an urgent policy. There's uranium coming out of our ears, frankly, just now.

GREG JENNETT: Even so, the potentially divisive debate is already under way.

ANTHONY ALBANESE, OPPOSITION ENVIRONMENT SPOKESMAN: It's a policy which I continue to support and which I believe an overwhelming majority of Labor Party members support.

GREG JENNETT: Premier Wen's visit has also put more momentum behind the proposed free trade agreement between Australia and China. Both leaders have agreed to accelerate the talks with an end date in mind.

MARK VAILE, TRADE MINISTER: They would like to see the negotiations concluded within the next one to two years and that certainly gives clear guidance to ministers and key officials.

GREG JENNETT: In pursuing a foreign policy, which looks towards both Washington and, increasingly, Beijing, Australia spends time reassuring both of their importance. This visit was no exception. John Howard told the Premier Australia's relationship with America will not affect its partnership with China. Premier Wen offered reassurances of his own.

WEN JAIBAO (Translation): China will not pose a threat to anyone. China's defence policy is transparent.

GREG JENNETT: And soon to get hold of this country's uranium, it's an assurance Australia will want to hear more often. Greg Jennett, Lateline.